Supreme Court of India
KANCHERLA LAKSHMINARAYANAversusMATTAPARTHI SYAMALA AND ORS.
- Citation
- 2008 INSC 380
- Decided
- 14 March 2008
- Disposal
- Case Allowed
- Bench
- S B SINHA
Holding
The Supreme Court held that an objection under Order XXI Rule 58 is maintainable until the sale is confirmed, and the term "sold" includes confirmation of the auction, thereby granting the appellant locus standi to object.
Summary
The appellant entered into an agreement of sale for 14 acres with the second respondent but the sale deed was never executed, prompting the appellant to file a suit for specific performance (OS No.31 of 2000). The first respondent, the wife of the second respondent, obtained a maintenance decree and, after the second respondent failed to pay arrears, the property was attached and sold at public auction, where the third respondent became the highest bidder. The appellant filed an execution petition under Order XXI Rule 58 CPC objecting to the auction, claiming the sale should be subject to his pending specific performance suit. The trial court and the Madras High Court dismissed the objection, holding that once the property was "sold" the objection was untenable. The Supreme Court held that the term "sold" in the proviso to Rule 58 means a complete sale including confirmation, and since the sale had not been confirmed, the objection was maintainable; moreover, the appellant had locus standi because of his prior agreement of sale. Consequently, the appeal was allowed and the execution court was directed to consider the appellant's objections.
Issues considered
- The correct interpretation of the term "sold" in clause (a) of the proviso to Order XXI Rule 58 CPC.
- Whether an objection to an attachment and auction is maintainable when the auction has been held but the sale has not been confirmed.
- Whether the appellant, based on a pending agreement of sale, has locus standi to raise an objection to the auction sale.
Legislation cited
- Code of Civil Procedure, 1908s. Order 22 Rule 101, s. Order XXI Rule 58 (proviso clause a), s. Section 65
Subjects
ExecutionAuctionOrder XXI Rule 58Locus standiSpecific performanceSale confirmationCivil ProcedureProperty attachmentObjection to sale
Judgment
[2008] 5 S.C.R. 224
A KANCHERLA LAKSHMINARAYANA ,._ -
v.
MATTAPARTHI SYAMALA AND ORS.
(Civil Appeal No. 2001 of 2008)
MAR.CH 14, 2008
B
[S.B. SINHA ANID V.S. SIRPURKAR, JJ.]
Code of Civil Proce!dure, 1908 - Order 21, Rule 58,
proviso clause (a) - Execution - Auction :
c Time factor - Sale was not confirmed - Objection to
auction and for setting aside of auction sale - Maintainability
of - Held: Maintainable - Mere holding of auction would not
bar the objections thereto - The word 'sold' in Clause (a) of
proviso to Rule 58 to be understood as complete sale
D including confirmation of auction.
Locus factor - Obje'Cfion by alleged purchaser on the 1-
basis of agreement of sal19 - Held: Purchaser cannot be utter
outsider having no locus standi to take the objections as he
filed suit on the basis of cin agreement of sale which was not
E
denied by the seller.
Second respondent executed an agreement of sale
of suit property and received part consideration amount.
However, he failed to E!xecute the sale deed inspite of
F several requests. Appellant filed a suit for specific
performance of sale .agreement. Subsequently first
respondent who was wife of second respondent filed a
maintenance case agaiinst her husband and obtained
therein injunction order restraining second respondent
from alienating the properties. This suit was decreed. The
G
first respondent filed E:xecution Petition for recovery of
arrears of maintenancEi but second respondent did not
pay the arrears amount and instead filed IA to set aside
~ ·~
the decree. This application was dismissed.
H 224
KANCHERLA LAKSHMINARAYANA v. MATTAPARTHI 225
SYAMALAAND ORS.
The first respondent again filed execution petition for A
execution of the decree. A public auction was ordered and
the same was conducted in which the third respondent
purchased the suit property.
The appellant filed a petition before the Executing
Court under the provisions of Order 21 r.58 CPC raising B
objections to the said auction and to declare that the sale
is subject to appellant's claim in suit for specific
performance filed by him which was pending. This
application was dismissed by the subordinate Court
which was upheld by High Court on the ground that once c
the sale takes place during the execution, then objection
raised would be of no consequence and the application
would be untenable. Hence the present appeal.
Allowing the appeal, the Court
D
_., HELD: 1. The High Court and the Trial Court were in
utter error in relying on proviso to Clause (a) to Rule 58 of
Order 21 CPC. Mere holding of the auction does not bar
the objections thereto. Since the sale was not confirmed,
that made substantial difference. The word "sold" in E
Clause (a) of the proviso to Rule 58 Order 21 CPC has to
be read meaning thereby a complete sale including the
confirmation of the auction. That not having taken place,
it cannot be said that the objection by the appellant was
ill-founded or untenable as has been held by the High F
Court and the Trial Court. [Paras 10, 16] [240-F; 234-B-C]
Mis. Magunta Mining Co. v. M. Kondaramireddy & Anr.
AIR (1983) A.P. 335 - affirmed.
Vannarakkal Kallalathil Sreedharan v. Chandramaath
G
Balakrishnan & Anr. (1990) 3 SCC 291; Rango Ramachandra
Kulkarni v. Gurlingappa Chinnappa Muthal AIR 1941 Born.
... _... 198; Yeshvant Shanker Dunakhe v. Pyaraji Nurji Tamboli AIR
1943 Born 145; Kochuponchi Varughese v. Ouseph Lonan
AIR 1952 TC 467; Kewal Singh v. Umesh Mishra AIR 1983
H
226 SUPREME COURT REPORTS [2008] 5 S.C.R.
A Patna 303 - referred to.
2. It cannot be said that the present appellant has no
locus standi to raise an objection to the sale for the simple
reason that he had filed a suit on the basis of an Agreement
of Sale. The factum of the Agreement of Sale was not
8 denied by the second rnspondent. Therefore, whether the
Agreement of Sale was a good Agreement of Sale entitling
the appellant for specific performance on the basis of that
agreement is essentially a question to be decided
subsequently in the suit (though the suit is earlier to the
C suit filed by the first respondent). Under such
circumstances there was a cloud on the property and a
person like appellant who had the obligation qua the
property in the shape of an Agreement of Sale could not
be held to be an utter outsider having no locus standi to
D take the objections. [Para 14] [238-F-H; 239-A]
Most. Puphup Dei Kuar v. Ramcharitar Barhi AIR (1924)
Pat. 76; Janki Mohan & Anr. v. Dr. S. Samaddar & Ors. AIR
(1962) Patna 403; Sasthi Charan Biswan Banik & Ors. v.
Gopa! Chandra Saha & Ors. AIR (1937) Cal J90; Mt.Puhupdei
E Kuar v. Ramcharitar Barhi & Ors. AIR (1924) Patna 76; C.
Jagannadhan v. Padayya AIR (1931) Mad 782; Puma
Chandra Basak v. Dau/at Ali Mollah AIR 1973 Cal. 432; Desh
Bandu Gupta v. N.L. Anand & Rajinder Singh (1994) 1 SCC
131 - referred to.
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2001 of 2008.
From the final Jud£1ment and Order dated 16.03.2007 of
the High Court of Judicature at Madras in C.M.A. No. 3245 of
G 2004.
P.S. Narasimha, V. Pattabhiram, L. Roshmani, Mandakini
Sharma and S.S. Dharma Teja for the Appellant.
K.V. Viswanathan,A. Ramesh, K. Rajeev, R. Chandrachud,
H G. Madhav, T.N. Rao and K. Sarada Devi for the Respondents.
KANCHERLA LAKSHMINARAYANA v. MATIAPARTHI 227
SYAMALAAND ORS. [V.S. SIRPURKAR, J.]
The Judgment of the Court was delivered by A
V.S. SIRPURKAR, J. 1. Leave granted.
2. The dismissal judgment of the Madras High Court in
Civil Miscellaneous Appeal under Order 43 Rule 1 of the Code
of Civil Procedure, filed by the appellant herein, is in challenge B
)'
before us. This appeal was filed against the order dated
9.9.2004 passed by Subordinate Judge, Yanam in Execution
Application No.9 of 2003 in Execution Petition No.15 of 2002.
The said Execution Application was filed under Order XXI Rule
58 whereby the appellant sought to make a prayer for raising c
the attachment on the suit property or in the alternative to declare
the sale being subject to the claim in Original Suit being OS
No.31 of 2000. The following facts will highlight the controversy.
3. S~cond Respondent herein, namely, Mattaparthi Satyam
owned 14 acres of land. He put up the said land for sale and the D
present appellant having offered highest market value of
Rs.29,000/- per acre, executed an Agreement of Sale for 14
acres in favour of the appellant on 201h March, 1993 after having
received a sum of Rs.1 lakh from the appellant. The appellant
thereafter paid Rs.2 lakhs on 27.3.1993 and Rs.20,000/- on E
16.4.1993 which payments were endorsed on the reverse side
of the Agreement by the Second Respondent. However, the
Second Respondent failed to execute the registered Sale Deed
inspite of several requests and, therefore, the present appellant
filed Original Suit No.605of1996 before the Subordinate Judge, F
Pondicherry for specific performance of the Sale Agreement
which suit was later on transferred to Sub Court, Yanam and
was renumbered as Original Suit No.31 of 2000. The said suit
is still pending.
4. In the year 2000, the first respondent, who is none else G
but the wife of the second respondent filed a maintenance case
being OP No.34 of 2000 before the Family Court, Yanam. She
~~ filed one IA No.582 of 2000 seeking an injunction restraining
the second respondent from alienating the schedule properties
and this application was granted on 17.2.2000. This petition H
228 SUPREME COURT REPORTS [2008] 5 S.C.R.
A was also transferred to the Sub Court Yanam and was re-
numbered as OS No.63 of 2000. Thereafter this suit was
decreed on 22.1.2002. Execution Petition No.10 of 2002 came
to be filed on the basis of the decree passed in OS No.63 of
2000 for recovery of arrears of maintenance payable by the
B second respondent to the first respondent. The second
respondent did not pay the arrears of maintenance but instead
filed IA No.4 of 2003 in OS No.63 of 2000 before Sub Court,
Yanam to set aside the above decree dated 22.1.2002.
However, even this application was dismissed on merits on
c 27.2.2003. The first respondent thereafter filed E.P. No.15 of
2002 before Sub Court, Yanam for execution of the decree
dated 22.1.2002 passed in OS No.63 of 2000. A public auction
was ordered in that Execution Application and the same was
conducted on 2. 7.200:~ in which public auction the third
respondent herein purchased the said suit property. The present
0
appellant, therefore, filedl a petition in E.P. No.15 of 2002 in OS
No .63 of 2000 under the provisions of Order XXI Rule 58, raising
objections to the said auction and to declare that the sale is
subject to the appellant's claim in OS No.31 of 2000 which was
pending on the file of Sub Court, Yanam. This application was
E numbered as Execution Application No.9 of 2003. The said
application came to be dismissed by the Subordinate Court.
The appellant herein filed an appeal against the said order of
dismissal dated 9.9.2004. However, by its order dated
16.3.2007, the High Court of Madras dismissed CMA 3254 of
F 2004 holding that the application was not maintainable. The
logic of the Madras High Court as well as the Trial Court seems
to be that once the sale takes place during the execution, then
the objection raised would be of no consequence and the
application will be untenable. The High Court has thus
G considered the question c>fthe stage at which the objection could
be raise'd and has dealt with that such objection would not be
tenable on the backdrop of the language of Clause (a) of proviso
to Order XXI Rule 58. The stress is thus on the stage at which
1the objection could be raised (or the time when the objection is
H raised). These concurrent orders are now in challenge before
KANCHERLA LAKSHMINARAYANA v. MATIAPARTHI 229
SYAMALA AND ORS. [V.S. SIRPURKAR, J.]
(
--\ us. A
5. Shri Narasimha, learned counsel appearing on behalf
of the appellant took us through the orders and contended that
the view expressed by both the courts below to the effect that
the Execution Application is not tenable is patently incorrect. As
against this Shri Vishwanathan, learned counsel appearing on B
.,.
·behalf of the first respondent and Shri Chandrachut:I, learned
counsel appearing on behalf of the third respondent supported
the order contending that in the wake of the completed auction
under Order XXI Rule 58, the High Court and the Trial Court
were justified in holding that the appellant's claim was not c
tenable at all. It is, therefore, to be seen as to whether the
appellant's claim is tenable at all.
6. Learned counsel. for the appellant took us through both
the orders and firstly pointed out that the suit by the appellant
D
being OS No.605/96 before Sub Court, Pondicherry which was ·
~
later on transferred to Sub Court, Yanam and re-numbered as
OS No.31 of 2000 was prior in point of time. From that suit it is
clear that the first respondent was the wife of the second
respondent. Though she fully knew about the pendency of the
. aforementioned suit, not only filed another suit but brought a E
decree. According to the appellant it is obvious that the said
decree was a collusive one. As if this was not sufficient, she
also attached the very same property which was the subject
matter of OS No.31 of 2000 and got it sold in a public auction
on 2. 7.2003. It was pointed out that the sale was not confirmed. F
Learned counsel, therefore, pointed out that the appellant not
)-
only had a substantial obligation regarding the property but was
rightly entitled to object to the auction sale. Thus, the learned
counsel urges that even after the sale the objection to the
attachment and the sale could be raised and more particularly G
because the present appellant would be necessarily a person
having locus standing due to obligation regarding the property.
'__. According to the learned counsel these two factors, namely, the
time of taking the objection and the locus of the objector have to
be considered and while the courts below considered only the H
230 SUPREME COURT REPORTS [2008] 5 S.C.R.
A "time factor" or the "sta~1e factor", the court did not consider the
"locus factor".
7. As against this a contention was raised by the learned
counsel Shri Vishwanathan that the wife, respondent no.1 herein,
had filed OP No.34 of 2000 in Family Court in her individual
8 right as a wife. She had also secured the order of injunction
restraining the second respondent from alienating the schedule
properties as she was interested in the property being preseNed
so that she could recov13r her maintenance out of that property
and there was nothing wrong in it. It is pointed out that the
C injunction was granted and though there was a publication about
the same, the appellant never raised any objection to it. The
said OP which was renumbered as OS 63 of 2000 came to be
ultimately decreed and there was nothing wrong on the part of
the first respondent iri filing the Execution Petition No.10 of 2000
D for recovery of arrears of maintenance and when the second
respondent did not comply with the orders, she was driven to
file Execution Petition No.15 of 2002 for the sale of the schedule
property by public auction to recover the arrears of maintenance.
He further claimed that the second respondent had never brought
E to her knowledge about OS No.31 of 2000. Learned counsel,
therefore, claimed that there was no collusion between the first
and the! second respondent and her rights of maintenance are
independent of any said suit which had arisen 18 years ago
when her marriage was solemnized with the second respondent.
F Our attention was drawn even to the counter filed by the second
respondent before the Trial Court where the second respondent
had denied the Agreement. It was alleged by him that the
Agreement set up by th13 appellant was only by way of security
as the appellant had advanced a sum of Rs.1 lakh to be paid to
G Mattaparthi Syamala and others on behalf of the second
respondent. It was pointed out that the second respondent had
flatly denied any such Agreement to Sell. Learned counsel,
therefore, urged that thei courts below were right in holding the
application, filed by the appellant, to be not tenable particularly
.... -
in view of the completed auction under Order XXI Rule 58.
H
II
KANCHERLA LAKSHMINARAYANA v. MATIAPARTHI 231
SYAMALAAND ORS. [V.S. SIRPURKAR, J.]
k --\ 8. Even the learned counsel appearing on behalf of third A
respondent urged that he was a bona fide purchaser of the
auction held on 2.7.2003 and he was the highest bidder and
that he did not know about OS No.31 of 2000 filed by the
appellant. It was his contention that in fact the appellant, in
collusion with the second respondent, had filed an objection to B
the Execution. He pointed out that the third respondent had
deposited the entire bid amount into the court and only the
confirmation of sale had remained to be done.
9. Shri Narasimha, learned counsel appearing on behalf
of the appellant invited our attention to the language of Order c
XXI Rule 58 CPC which is as under:
"58. Adjudication of claims to, or objections to
attachment of property. - (1) Where any claim is
preferred to, or any objection is made to the attachment
D
of, any property attached in execution of a decree on the
ground that such property is not liable to such attachment,
the Court shall proceed to adjudicate upon the claim or
objection in accordance with the provisions herein
contained:
E
Provided that no such claim or objection shall be
entertained -
(a) where, before the claim is preferred or objection
is made, the property attached has already been
sold; or F
(b) where the court considers that the claim or
objection was designedly or unnecessarily delayed.
(2) )()()()()()('
(3) )()()()()()( G
(4) )()()()()()(
(5) xxxxxx"
•• -t
It is pointed by the learned counsel from the language of
the clause (a) of proviso to Rule 58(1) that where any objections H
232 SUPREME COURT REPORTS (2008] 5 S.C.R.
A are taken to the attachment on the ground that such property is 1--
not liable to attachment,, the court has to proceed to adjudicate
upon the claim or objHctions in accordance with the Rule.
Learned counsel further argues that there is a rider to this Rule
in the shape of a proviso and it is suggested that such claim or
B objection need not be entertained where firstly the property
attached has already bEien "sold". Learned counsel points out
that merely because of the auction of the suit property, it cannot
"
be said that the said pro1Perty is sold, thereby leaving no right in
or opportunity with the objector to object to the attachment.
Learned counsel invited our attention to the judgment of the
c Andhra Pradesh High Court in M/s.Magunta Mining Co. v. M.
Kondaramireddy & Another [AIR (1983) A.P. 335) where the
similar situation had arisen on the basis of an application made
by the appellant under Order XXI Rule 58 CPC. The objector
was none else but the son of the Judgment-Debtor whose
D property was auctioned. The objection was that since there was ·
a prior lease in respect of the said property and since in
pursuance of that leas1e the objector-appellant had been in r
possession of the same and, therefore, the attachment was not
valid and has to be vacated. An objection was also raised that
E the properties which w1ere attached were already sold and,
therefore, the objection to the attachment and the appeal had
become infructuous. Thie Court, therefore, dealt with the effect
of the court sale conductBd by the lower court. It was an admitted
position that before the said order of High Court reached the
F sale was already compl1eted in respect of all the items where
the Decree-holder hims1elf purchased the properties. It is also
seen from the facts that there the sale was not confirmed. The .....
Division Bench, speaking through Hon'ble Jagannadha Rao, J.
(as His Lordship then was) observed in para 15:
G "VVhenever a claim is preferred under 0. 21 R. 58 CPC
against attachment of immovable properties, the fact that
thE! properties are sold or the sale confirmed will not deprive
thE! court of its jurisdiction to adjudicate on the claim. The +- 4,
inquiry into the claim can be proceeded with by the trial
H court or the appellate court (under the amended Code)
KANCHERLA LAKSHMINARAYANA v. MATTAPARTHI 233
SYAMALA AND ORS. [V.S. SIRPURKAR, J.]
and in the event of the claim being allowed, the sale and A
the confirmation of sale shall to that extent be treated as
a nullity and of no effect, as the judgment-debtor had no
title which could pay to the court auction-purchaser."
Relying heavily on this case the learned counsel pointed
out that there is no contrary decision of this Court on this issue B
and, therefore, this decision has to be held as good law. In
support of the argument that the appellant had the locus standi,
·the learned counsel pointed out that it is only during the pendency
.I
of the suit by the appellant which was based on the prior
Agreement of Sale in respect of the suit property that the C
subsequent suit for maintenance was filed by the wife and the
decree obtained and, therefore, obviously the judgment-debtor,
the second respondent could not have passed a clean title during
the auction sale and it would have to be held that he could not
pass better rights that he himself had. Learned counsel urged o
that the rights which were passed on to the auction purchaser in
the court sale were subject to the Agreement of Sale. In support
of this proposition the learned counsel relied on the reported
decision in Vannarakkal Kallalathil Sreedharan v.
Chandrarnaath Balakrishnan & Anr. [(1990) 3 SCC 291] E
where the situation was more or the less same. This Court in
para 9 observed:
" .... The agreement for sale indeed creates an obligation
attached to the ownership of property and since the
attaching creditor is entitled to attach only the right, title F
and interest of the judgment-debtor, the attachment cannot
be free from the obligations incurred under the contract
for sale ... "
This Court had held the decisions by Bombay High Court
in Rango Rarnachandra Kulkarni v. Gurlingappa G
Chinnappa Muthal [AIR 1941 Born. 198] and Yeshvant
Shanker Dunakhe v. Pyaraji Nurji Tarnboli [AIR 1943 Born
145] and the High Court ofTravancore-Cochin in Kochuponchi
Varughese v. Ouseph Lonan [AIR 1952 TC 467], to the same
effect to be the good law. H
234 SUPREME COURT REPORTS [2008] 5 S.C.R.
A 10. On the basis of these two judgments, the learned
counsel urged that the objection application in the Execution
Petition could not have been, therefore, thrown away by the Trial
Court and the High Court as not being maintainable. Considering
the law laid down in Magunta Mining's case (supra) it must be
B said that mere holding of the auction does not bar the objections '.,.....
thereto. It is our considered opinion that in this case the sale '
...
was not confirmed and that made substantial difference. The r
•
word "sold" in Clause (a) of the proviso to Rule 58 has to be
read meaning thereby a complete sale including the
confirmation of the auction. That not having taken place, it cannot
c be said that the objection by the appellant was ill-founded or
untenable as has been held by the High Court and the Trial Court.
11. However, a contrary view has been taken by the Patna
High Court in a reported decision in Kewal Singh v. Umesh
D Mishra [AIR 1983 Patna 303] where the Division Bench of the
Patna High Court held that the term "sold" used in proviso (a)
means the stage when the property is auctioned by the court
t·-
and the bid is accepted by the court. The term does not refer to
the stage of confirmation of the sale when it is made absolute
under Rule 92. The learned Judge who was considering the
E
interpretation of the proviso, after clearing some factual grounds,
discussed the issue in para 7 of the judgment. In coming to the
conclusion that the word "sold" would include the sale under Rule
58, even when it is not made absolute under Rule 92, the learned
Judge has taken into account the term "sold", "sale set aside"
F and "sale confirmed and made absolute". The learned Judge
held that these three terms referred to three stages in relation
to the court sale. While Rule 58 provides for the objection made
before the property is "sold", Rule 64 and onwards provide for
the proclamation of sale. The learned Judge then took note of
G two headings, one with respect to the sale of movable property
and the other Rule 82 with respect to the sale of immovable
property. The learned Judge then proceeded to take note of
Rules 89, 90 and 91. It was noted by the learned Judge that the
implication of the term "the sale having been made absolute" ).. ·<
1H has been specifically provided in Section 65 of the Code which
'
·' KANCHERLA LAKSHMINARAYANA v. MATIAPARTHI 235
SYAMALAAND ORS. [V.S. SIRPURKAR, J.]
/ ... provided that where the immovable property is sold in execution A
of a decree and such sale has become absolute, the property
shall be deemed to have been vested in the purchaser from the
time when the property is sold and not from the time when the
sale become absolute. The learned Judge then observed as
under: B
l' "Thus, this rule is a pointer to the significance that though
the sale is complete when it is ultimately made absolute
but title to the purchaser vests from the date of the sale.
It may be noticed, at this place, that there are uses of the
two terms "property sold" and "sale becomes absolute" in c
this S. 65 and the two terms used in the same section
clearly suggests the two stages as to the sale having been
held and the sale subsequently made absolute. But what
I have to determine, in the present case is to find out the
meaning of the term 'the property already sold' in the D
proviso to R. 58 mentioned above. That term speaks of
-· the 'sale held' and not 'sale having been made absolute'
and as the distinction may be marked the former term
used in S. 58 implies that that refers to the stage when the
"sale was held'' and not the stage which would come · E
subsequently when the "sale is made absolute". I am
supported of this view by two Bench decisions of this
Court and a Bench decision of the Calcutta High Court ... "
The learned Judge then made reference to the decision in
Most. Puphup Dei Kuar v. Ramcharitar Barhi [AIR 1924 F
Pat. 76] and proceeded to hold ultimately that:
)..
"I am of the view that the term 'property has been already
sold' used in the proviso to Cl. (1) of R.58 refers to the
stage when. the sale had taken place and does not refer
G
to the stage when the sale becomes absolute."
Learned counsel for the respondent very heavily relied on
this judgment and pointed out that the decision in M/s.Magunta
1~ -+
Mining Co's case (supra) the court had not considered the
impact of Section 65 CPC. It will, therefore, be our task to decide H
236 SUPIREME COURT REPORTS [2008] 5 S.C.R.
A the correctness or otherwise of both the judgments.
12. Reverting back to the judgment of Andhra Pradesh High
Court in M/s.Magunta Mining Co's case, it will be seen that in
.. -
para 14 of its judgment, the !learned Judge considered the
impact of Ordeir XXI Rule 59. The learned Judge held:
B
"The provisions of 0. 21 Ru.59 CPC show that where
before a claim is prefermd or objection made, and the
"
property attached had already been advertised for sale,
the court may, if the property is immovable, make an order,
c that pending the adjudication of the claim or objection the
property shall not be sold, or that pending such adjudication,
the property may be sold but the sale shall not be confirmed
and any such order may be made subject to such terms
and conditions as to security or otherwise as the court
. ·thinks fit. This provision tlherefore provides that pending
D
·adjudication of a claim in respect of immovable property
the court may proceed with the sale but stay the -1-
confirmation. Obviously this has been made with a view to
expedite the sale proceedings so that in the event of the
claim being rejected, the further proceedings can go on
E expeditiously. But it is clear that as long as the sale is not
confirmed the status quo ante can be restored in case the
claim is allowed. It has been held that once the claim
petition is allowed the sale will be treated as void because
the interest of the judgment-debtor that was sold did not
F in fact belong to him and the Court auction-purchaser Would
not get any title to the prop.erty as the judgment-debtor
had no interest therein and because the claimant continues
to retain his interest in those properties vide Bibi Umatul
Rasul v. L.akho Kuer[AIR (1941] Patna 405]. To the same
G effect is the decision in Madho/al v. Gajrabi [AIR (1951)
Nag. 194]."
'The term of 0.21 R.63 are imperative and they declare
that any order passed by the executing Court is subject to ~ ~ ....
the result of such a suit. In Phul Kumari v. Ghanshyam
H
KANCHERLA LAKSHMINARAYANA v. MATIAPARTHI 237
SYAMALAAND ORS. [V.S. SIRPURKAR, J.]
.,
Misra, (1907) ILR 35 Cal 202: (35 Ind App 22 (PC) their A
~
Lordships of the Privy Council pointed out that the object
of a suit under S.283, Civil P.C. of 1882 which corresponds
to 0. 21 R. 63 of the present Code is in effect to set aside
a summary decision. When the claimant succeeds in
getting a decree in his favour declaring his title to the B
property attached and that the property is not liable for
attachment and sale in execution of a particular decree
the executing court's power to sell the property in that
execution proceedings must cease. The claimant's
success in a suit under 0. 21 R. 63 ousts the jurisdiction
of the executing court. If that is the result, the sale must be
c
pronounced to be a nullity and consequently not capable
of being confirmed under 0. 21, R. 92, Civil P.C."
These observations will show that the Andhra Pradesh High
Court not only considered the language of Rule 59 and the impact D
thereof as clearly displayed but also went on to consider the
-- fact of the prior obligation regarding the objector in the property
and the fact that even if the sale is effected uncfer Rule 58, it
cannot obliterate the claims of the ·objectors which were created
prior to the sale. This very situation with regard to impact of the
E
prior interest in the shape of Agreement of Sale was taken into
consideration in the subsequent judgment of Vannarakkal
Kallalthil Sreedharan (cited supra) wherein the judgments of
the Bombay High Court and the Travancore-Cochin High Courts
were approved. Thus in considering the "time factor" of
challenging the sale, the judgment also considers the "locus F
standi factor'' on account of any prior interest of the objector in
). the suit property. This situation is very conspicuously absent in
thejudgment of the Patna High Court which has merely chosen
to go by the language of S13ction 65 CPC. We must hasten to
·add that even if under Section 65 CPC, the title "after the sale G
has been made absolute under Rule 92" relates back to the
date of sale, it would still be subject to the earlier rights of the
objector and his interest in the suit property. Therefore, in our
.,..., -+ opinion Section 65 would not, by itself, provide any guidance
regarding the interpretation of the term "sold" in the said proviso. H
238 SUPREME COURT REPORTS [2008] 5 S.C.R.
A Once it is held, as has be,en confirmed by this Court in ,.
Vannarakkal Kallalathil .Sreedharan's case that the
attachment cannot be free from the obligations under the
contract of sale, then the nect~ssary sequatur must follow that
even after the! factum of sale the objection would still lie before
s the sale is made absolute. In our opinion, therefore, the law laid
down by the Andhra Pradesh High Court in Mls.Magunta
Mining Co's case is preferable to the law laid down by the
Patna High Court in Kewal Singh's case.
13. We have examined the relied on judgments of the
C Patna High Court reported in Janki Mohan & Anr. V. Dr. S.
Samaddar & Ors. [AIR 1962 Patna 403] where the High Court
relied on the judgments of the Calcutta High Court in Sasthi
Charan Biswan Banik & Ors. V. Gopal Chandra Saha &
Ors. [AIR 1937 Cal 390] as also judgment of Patna High Court
D in Mt.Puhupdei Kuar v. Ramcharitar Barhi & Ors. [AIR 1924
Patna 76]. However, since we have taken a view that the
judgment of the Andhra Pradesh High Court is correct, those .,. -
judgments would have to be held as not laying down a good
law. A contrary view has been taken by Madras High Court in C.
E Jagannadhan v. Padayya· [AIR 1931 Mad 782] which
supports the view of Andhra Pradesh Judgment. We approve
of that view.
14. Again, it cannot be said that the present appellant has
no locus standi to raise an objeiction to the sale for the simple
F reason that he had filed a suit on the basis of an Agreement of
Sale. The factum of the Agreement of Sale was not denied by
the second respondent. Therefore, whether the Agreement of
Sale was a good Agreement of Sale entitling the appellant for
specific performance on the basis of that agreement is
G essentially a question to be decided subsequently in the suit
(though the suit is earlier to the suit filed by the first respondent).
Under such circumstances there was a cloud on the property
and a person like appellant who had the obligation qua the
property in the shape of an Ag1reement of Sale could not be
H held1 to be an utter outsider having no locus standi to take the
KANCHERLA LAKSHMINARAYANA v. MATIAPARTHI 239
SYAMALAAND ORS. [VS. SIRPURKAR, J.]
r ... objections. This is the import of the aforementioned decision in A
Vannarakkal Kallalthil Sreedharan's case. To the same
effect is the judgment in Pur.na Chandra Basak v. Daulat Ali
Mollah [AIR 1973 Cal. 432] where the learned Single Judge of
that Court has held:
'f "An attaching creditor can only attach the right, title and B
interest of his debtor at the date of the attachment and on
principle, his attachment cannot confer upon him any higher
right than the judgment-debtor had at the date of the
attachment. If a person, having a contract of sale in his
favour, has such pre-existing right the attachment could c
not be binding upon him. If the promise get a conveyance,
after the attachment, in pursuance of his contract, he takes
a good tile inspite of the attachment. "
The observations would only highlight the importance of
D
the Agreement of Sale which is prior in time of the attachment
as also the unconfirmed sale.
15. Learned counsel also points out the observations of
this Court in Desh Bandu Gupta v. N.L. Anand & Rajinder
Singh [(1994) 1 SCC 131] in paragraph 5 which are to the E
following effect:
"The auction-purchaser gets a right only on confirmation
of sale and till then his right is nebulous and has only
right to consideration for confirmation of sale. If the sale
is set aside, part from the auction-purchaser, the decree F
holder is affected since the realisation of his decree debt
is put off and he would be obligated to initiate execution
proceedings afresh to recover the decree debt."
(Emphasis supplied) G
From this the learned counsel contended that since in this
case the sale had remained to be confirmed, there was no
~~ -+
question of holding the appellant to be an utter outsider or
throwing his application as untenable.
H
240 SUPREME COURT REPORTS [2008] 5 S.C.R.
A· 16. It was urged before the High Court that the provisions
of Order XX.I Rule 58 read with the provisions of Order 22 Rule
101 spells out the duty of the court to adjudicate all the questions
relating to the rights of the parties and that the Executing Court
had failed to consider the provisions in the proper perspective
B and it should have decided as to whether the decree between
the first and second respond1~nts is a collusive decree merely
meant to defeat the right of the a·ppellant herein. The
aforementioned proviso to Rule 58 and more particularly Clause
(a) thereof was the only provision relied upon by the High Court
c which is clear from the observations made in internal page 10
of the judgment of the High Court in the following words:
"Clause 5 of Order 21 Rule 58 CPC deals with a situation
where the claim or objection under the proviso to sub-rule
(1) is refused to be entertained by the court, the party
D against whom such order is made may dispute, but,
subject to the result of such suit, if any, an order so refusing
to entertain the claim or objection shall be conclusive. The ·
highest bidder in the auction sale has been declared as
the purchaser and that therefore, the proviso to Order 21
E Rule 58 CPC is attracted."
We have already shown that this is not the situation in law.
The High Court further went on to suggest that a merely
Agreement holder could not prevent the right of the auction-
purchaser to get the sale confirmed. This statement is also
F patently incorrect statement in law. We have, therefore, no
hesitation in holding that the Hi!~h Court and the Trial Court were
. in utter error in relying on proviso to Clause (a) to Rule 58 of
Order XXI CPC. The appeal has, therefore, to succeed. The
Executing Court thus shall be obliged to decide the objections
G raised by the appellant.
17. In the above circumstances the appeal is allowed. f
However, in the facts and circumstances of the case, there will ~ ...
be no order as to costs.
H D.G. Appeal allowed.
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